CHARACTERISTICS OF THE SOCIAL
SECURITY SYSTEM IN FINLAND
MINISTRY OF SOCIAL AFFAIRS AND HE ALTH
Brochure 8eng (2013)
Brochures of the Ministry of Social Affairs and Health 8eng
CHARACTERISTICS
OF THE SOCIAL SECURITY
SYSTEM IN FINLAND
MINISTRY OF SOCIAL AFFAIRS AND HE ALTH
Helsinki, Finland 2013
Characteristics of the Social Security System in Finland
Brochures of the Ministry of Social Affairs and Health 8eng
ISBN 978-952-00-3371-2 (pb)
ISBN 978-952-00-3372-9 (PDF)
http://urn.fi/URN:ISBN:978-952-00-3372-9
www.stm.fi/en/publications
Images: Tuulikki Holopainen, Heli Sorjonen, Plugi, Rodeo
Publisher: Ministry of Social Affairs and Health, Finland
Layout and printing: Finnish University Print – Juvenes Print, Tampere 2013
Contents
1. The Current Development of the Finnish Social Security System ...................... 6
2. Financing and expenditure ..................................................................................... 8
3. The Organisation of Social Protection ................................................................ 11
4. Branches of Social security ................................................................................... 13
Public Health Care Services .............................................................................. 13
Sickness Benefits ................................................................................................ 13
Health insurance ............................................................................................ 13
Rehabilitation ................................................................................................ 14
Care and disability allowances ...................................................................... 15
Family benefits ................................................................................................... 15
Industrial Accidents, Occupational Health and Safety ................................... 17
Pensions .............................................................................................................. 19
Pension benefits ............................................................................................. 20
Unemployment benefits ..................................................................................... 24
Housing Benefits ................................................................................................ 26
Social Assistance ................................................................................................ 26
5. Rights of complaint and appeal ............................................................................ 27
Appendix: Authorities and institutions .................................................................. 28
1. The Current Development of
the Finnish Social Security System
This brochure details the various components of the social security system and
their administration, the policy setting that
determines them, plus the costs of running
the system and the various trends and developments that affect the course of Finnish social policy.
Entitlement to the services and benefits
of the social security system in Finland is
universal for all people resident in the country. The system, which is funded primarily
from taxation and employment-related contributions, provides comprehensive health
care and social welfare for everyone at all
stages of life. It aims to promote people’s
involvement in and contribution to the development of a socially sustainable society.
These characteristics locate the Finnish system within the Nordic welfare system.
The Ministry of Social Affairs and
Health (MSAH) is responsible for developing legislation in the areas of social welfare
and health. It also acts to oversee, maintain
and assert the standards within the social
security system. The Ministry’s work is
determined by the current strategic policy
on social security contained in the Government Programme.
6
The long-range strategy for Finnish social
policy is set out in the strategy document Socially Sustainable Finland 2020. This details
the strategic vision and course for achieving a
socially sustainable society that
■
Treats all members of society fairly
■
Reinforces participation and a sense
of community
■
Supports health and functional
capacity
■
Provides the security and services
required by its members.
A distinctive feature of the social security system is the role of local authorities, or
municipalities, which handle the practical
work of service provision according to statutory requirements and monitoring as well
as recommendations and guidelines.
The municipalities operate social welfare and health services funded by the
municipal tax system and allocations from
central government. Private service providers operate a range of services locally in coordination with municipal authorities, in
addition to which users of private health
services may be reimbursed for a portion of
the costs they pay.
The reform of the municipal system
seeks in part to provide better-coordinated
health and social services.
The MSAH gives special attention in its
strategic planning to the sustainability of the
social security system. This comes against
the backdrop of the increasing globalisation
of the economy, the greater volatility of the
world financial system and changing patterns
in employment, cross border mobility, EU
integration and demographic compositions.
The strategic aims of the MSAH are
to make the social security system robust
enough to be able to continue to provide
universal coverage while at the same time
enhancing people’s functional capacity to
ensure full access to employment.
Employment is key to maintaining a
durable social security system, and a well
functioning system is crucial to sustaining employment and long working careers,
thereby promoting Finland’s economic
growth and competitiveness. This concern
is especially important because the population in Finland is ageing faster than elsewhere, a development that will increase
the demands on the social security system.
It is with this in mind that the MSAH
strategic plan Socially Sustainable Finland
2020 triangulates its core strategies of providing a strong foundation for welfare, access to welfare for all, and a healthy and
safe living environment into a single ensemble.
7
2. Financing and Expenditure
The social security system is financed partly
by the state and partly by the insurance contributions made by employers and employees. The state is generally in charge of basic
(minimum) benefits and allowances. It also
contributes to funding pensions for specific
groups.
Taxation is the main source of funding
for public sector social and health care, provided by municipalities.
Insurance contributions by employers
and employees and membership contributions to unemployment funds provide for
earnings-related unemployment benefits.
The state contributes to these benefits. Employer and employee contributions also finance earnings-related pensions.
National pensions are funded by the
state. Employees, self-employed people and
employers finance health insurance in the
form of sickness benefits, while medical expenses insurance is covered by insured persons and the state.
Social spending was € 55.0 billion in
2010. This is close to 31% of Gross Domestic Product (GDP). Adjusted to per capita
■
■
■
■
■
Employers 35,8%
Employees and insured 12,1%
State 28,4%
Local authorities 17,7%
Returns from social protection funds 6%
Figure 1. The financing of social protection 2010
Source: THL
8
purchasing power this puts Finland on the
European Union average.
Municipal social and health expenditure
was € 20 billion in 2010, some 53% of total municipal spending. Social expenditure
mainly comprises pensions, sickness and
unemployment insurance, and the costs of
social and health services.
For the MSAH the development of the
economic dependency ratio represents the
most important national challenge for the
financing of the social security system. This
is particularly due to the increase in the
numbers of older people in the population
as the larger age groups reach retirement
and the average life span increases. The
working population is expected to undergo
a commensurate decrease, though this may
be lessened if immigration remains at the
level it has in recent years.
A positive trend in employment will help
keep the economic dependency ratio at a
manageable level. The pressures on financing the social security system are transmitted
through earnings-related contributions to employers and people who are insured.
Social expenditure, billions of €
■
■
■
■
■
■
■
■
■
■
Sickness and health
13 470
Disability
6 420
Old age
19 120
Survivors
1 720
Family and children
5 850
Unemployment
4 370
Housing 920
Other social protection 1 300
Administration
1 480
Total54 650
Figure 2. Social expenditure 2010
Source: THL
9
10
3. The Organisation
of Social Protection
The MSAH is responsible for implementing government policy on social security. It does this by drafting
legislation and developing the social security system.
The MSAH focuses on key priorities in social policy.
Its departments and special units manage and coordinate the practical work on implementing policy. Local
authorities have a strong degree of autonomy in arranging social and health care services.
The Social Insurance Institution (Kela) administers
the benefits system. Kela is an autonomous statutory
body overseen by Parliament. It administers benefits
and allowances related to unemployment, sickness, retirement and other pension benefits, conscripts, housing, disability and care for pensioners, and survivors.
A major part of the social security system comprises the various forms of insurance concerning pensions, workplace accidents and occupational disease.
These areas involve a mix of public and private sector
activity. For instance, the earnings-related pensions
system involves pension insurance companies, pension funds and foundations for people working in the
private sector. Pensions are administered by the Keva
institution.
The Finnish Centre for Pensions coordinates pension scheme activity on earnings-related pensions.
The Financial Supervisory Authority supervises insurance and pensions institutions.
11
Ministry of Social Affairs and Health
Pensions
• Old Age
• Disability
• Survivors
Accidents at
work
For national
pensions:
• Social
Insurance
Institution
(Kela)*
Private
insurance
companies
For earningsrelated
pensions:
• Private sector
employment
pension
insurance
institutions
and public
sector statutory earningsrelated
pensions
institutions.
• Central
body:
The Finnish
Centre for
Pensions
Unemployment
Health care
services and
reimbursements
Sickness and
maternity
benefits
Family
benefits
Housing
allowances
Social
assistance
and social
services
Unemployment
insurance funds
Local
authorities
Private
sector
services
Social
Insurance
Institution
(Kela)*
Local
authorities
Social
Insurance
Institution
(Kela) *
Social
Insurance
Institution
(Kela)*
Occupational
diseases
Central body:
Federation
of Accident
Insurance
Institutions
The Unemployment
Insurance Fund
(TVR)
Private
sector
services
Social
Insurance
Institution
(Kela)*
* An independent body under the Parliament responsible for the basic benefits.
Figure 3. Organisation of social protection in Finland
12
4. Branches of Social Security
Public Health Care Services
Entitlement to health services is based on residence. Public health care services comprise
primary and specialised services arranged by
health centres and hospital districts, respectively. Local authorities are primarily responsible for arranging health services. New
health care legislation that took effect from
May 2011 provides greater flexibility in matters of patient choice of place of health care
and in the collaboration between local authorities in arranging health care.
Local authority health services cover all
aspects of primary health care. Such services
include health advice and health examinations, medical treatment, mental health care,
transportation of patients, dental care, child
health clinics, family counselling and child
guidance clinics, health care in schools, student health care, occupational health care,
and screening and mass examinations. The
municipal authorities are also in charge of
providing rehabilitation so long as it does
not fall under the responsibility of the Social
Insurance Institution, the earnings-related
pension scheme, motor liability insurance or
another system.
Health centres generally charge a visit
fee, determined by the local authority. A
daily fee may be charged for short-term institutional care in health centre bed units
and hospitals. There is an upper limit of fees
for the year beyond which the services are
free. For long-term patients fees are mainly
determined on the basis of income.
Sickness benefits
Health insurance
All residents in Finland are covered by national health insurance. Statutory health insurance provisions comprise medical treatment
insurance and daily allowance insurance.
The reimbursement for medical treatment and related expenses for people covered
by the Finnish health insurance scheme comprises outpatient medicines, sickness-related
travel costs and private sector treatment.
Reimbursements for prescription medicines in out-patient treatment are divided
into high, basic and low reimbursement categories. The first entails a fixed sum that the
client pays, whereas in the remaining two
categories reimbursements are calculated as
a percentage of the price of the medicine.
There is an annual limit on the costs of medicines for clients (roughly 670 euros in 2013).
When this limit is exceeded, the amount
13
over the patient co-payment of EUR 1.50 per
medicine is refunded in full. Patients usually
obtain reimbursements on the spot by presenting their Kela card at the pharmacy.
Reimbursements also cover a proportion
of travel costs when receiving medical treatment, above a threshold payment that patients
have to pay themselves. This personal liability
covers single journeys and costs accrued over a
calendar year (about 240 euros per year).
Health insurance reimburses a portion of
private medical practitioner’s fees and dentist’s fees and the cost of the treatment. An
official schedule of rates governs the reimbursement of fees, medical examination and
treatment costs. About a third of the real
costs incurred by the insured are reimbursed.
Daily sickness allowance
The Social Insurance Institution (Kela) pays
sickness allowance for loss of earnings. In
cases where employers pay employees’ salaries during sick leave, the allowance is paid in
the form of compensation to the employers.
Sickness allowance entails a waiting period
of nine working days from the onset of work
incapacity. Recipients must be of working
age (between 16 and 67), employed at some
point during a three-month period before
becoming ill, and must be declared unfit to
work on medical grounds.
Sickness allowance is available for all
people who are insured, including full-time
14
students. The allowance is generally determined as a certain percentage of the insured
claimant’s declared and assessed earned income or the applicant’s earned income over
a six-month period. If there is no earned income, the insured claimant is paid a fixed
minimum daily allowance when he or she
has been unfit for work for 55 days. The allowance is treated as taxable income.
Rehabilitation
The rehabilitation services and related income security provided by the Social Insurance Institution relates to medical rehabilitation for people with severe disabilities,
vocational rehabilitation for people whose
working capacity has deteriorated or is at
risk, and discretionary rehabilitation.
Rehabilitation is provided in the form of
therapies and institutional rehabilitation.
The costs of rehabilitation are reimbursed
in full, and travel expenses are refunded
except for the rehabilitee’s own share of
the costs.
A rehabilitation allowance is paid for the
rehabilitation period, if the purpose of the
rehabilitation is to enable the person concerned to remain in active employment, to
return to work or to enter the labour market.
The amount of the rehabilitation allowance
is generally determined in the same way as
the allowance provided by the health insurance scheme.
Care and disability allowances
Disability allowance for people
under 16 years of age
The purpose of disability allowance is to support people with disabilities over 16 years to
manage everyday life, work and studies. This
allowance is payable to people who do not
receive a pension. Its amount is graded according to three categories.
materially and mentally equipped for raising children. The state contributes to the
expenses incurred by families in bringing
up children in a variety of ways, including
through financial support and arrangements
for childcare. The system of family leave ensures that both parents have an equal chance
to be involved in childcare. It also helps to
combine work and family life, as do quality
early childhood education services.
Parents may receive a number of benefits
from the Social Insurance Institution. Benefits include maternity, paternity and parental
allowances. The qualification threshold is that
beneficiaries must have lived in Finland for at
least 180 days before the due date of their
baby. Insurance periods in other EU countries
are taken into account in assessing eligibility.
Care Allowance for Pensioners
Maternity allowance
The care allowance for pensioners is designed
to compensate people receiving pensions for
additional care costs caused by illness or disability. Eligibility depends on whether claimants’ ability to function has been reduced for
at least a year. The care allowance is graded in
three categories according to the need for care.
Mothers are entitled to maternity allowance
while on maternity leave. The allowance is
paid for the first 105 days of entitlement.
Mothers can go on maternity leave a maximum of 50 days before the due date, or a
minimum of 30 days. If employers pay salaries to mothers who are on maternity leave,
the allowance is paid to them.
Family benefits
Paternity allowance
Finnish family policy aims to provide children with a safe environment in which to
grow up, and to ensure that parents are
Fathers
Child care allowance is paid for a child
who, due to illness or handicap that has
persisted for at least six months, needs care
and rehabilitation that incurs a financial or
other burden. There are three categories of
childcare allowance.
Disability allowance
are entitled to 54 days of paternity allowance while on paternity leave after the birth
of their child. Adoptive fathers and people in
15
16
a registered partnership, regardless of gender,
are also eligible for paternity allowance.
Parental allowance
Parental allowance is paid for 158 working
days for parental leave, which follows maternity leave. Parental leave can be taken by
either mothers or fathers. The calculation of
maternity, paternity and parental allowances
use the same criteria. Both parents cannot
be on parental leave at the same time, except
in the case of multiple births, in which case
the payment period of parental allowance is
extended by 60 working days for each child.
Maternity grant
A maternity grant can either be taken as a
cash benefit or in the form of a maternity
package. The maternity package contains
clothes for the baby and other useful items.
Child benefit
The Social Insurance Institution pays a
monthly tax-free child benefit for each
child up until the age of 17. This is paid at a
higher rate for single parents.
security to look after a child under age of
three, though both parents cannot be on
full-time leave at the same time. Employers
are not required to compensate employees
who are on child care leave. After the period
of leave, employees are entitled to return to
their previous job or a comparable position.
Child home care and private day care allowances are paid in cases where children
are not in municipal day care, the former
until children reach the age of three, and the
latter until they start school.
Child maintenance allowance
Local authorities pay maintenance to support
children in a situation where a child under 18
does not obtain sufficient maintenance from
both parents. The child is entitled to maintenance allowance if the child’s father or mother does not pay his/her share of the child’s
maintenance. The right to maintenance also
applies to children born outside of marriage
where paternity has not been established. A
child adopted by an adoptive parent alone is
also entitled to maintenance allowance.
Child home care and
private day care allowances
Industrial Accidents,
Occupational Health
and Safety
After parental allowance ceases, parents can
take child care leave with full employment
The MSAH promotes occupational health
and safety at work by developing and super17
vising applicable legislation. It also takes
part in the international development of
occupational health and safety standards.
The risk of permanent incapacity is
reduced by promoting health and work
ability, improving work conditions and enhancing occupational health. A particular
concern has been to reduce workplace accidents and days lost to sick leave.
All employed people are covered by statutory occupational accident insurance. By
law employers are also required to arrange
occupational health services for their employees. Self-employed people can arrange
access to occupational health care on a voluntary basis. Employers can purchase occupational health services from a local authority health centre or private service supplier.
Employers are entitled to be reimbursed
for a portion of their occupational health
expenses. The same applies to entrepreneurs and self-employed people.
Occupational Accident insurance
A key feature of social security in occupational safety is the role of statutory accident insurance. Accident insurance entitles employees
to compensation for financial loss caused by
a workplace accident or occupational disease.
Accident insurance covers all employees
with work contracts. Self-employed people
can join the statutory insurance scheme on
a voluntary basis. Statutory insurance pro18
vides compensation for essential medical
treatment and loss of earnings. It includes
a daily allowance for short-term work incapacity linked to employees’ salary levels.
Extended occupational disability may
result in entitlement to an industrial injuries
pension, assessed at 85% of the employee’s
salary and dropping to 70% after the age
of 65. A partial allowance and partial pension may also be payable in case of partial
incapacity. A disability allowance is paid for
permanent incapacity caused by injury or
illness. Medical and vocational rehabilitation are also covered by accident insurance.
Employees’ group life insurance
Almost all employees are covered by group
life insurance. Employer obligations concerning insurance are contained in employment contracts. Group life insurance reimbursements are made as a single payment
to the deceased’s spouse and children, including those between the ages of 18 and 21
who are students.
National and earnings-related pensions
There are two statutory and complementary pension systems in Finland: the national
pension supplemented by a guarantee pension, and the earnings related pension. The
former provide basic income for people entitled to only very small earnings-related
pensions or none at all. The national pension is financed through taxes. The Social
Insurance Institution administers the national pension.
The earnings-related pension, under the
Employees Pensions Act (TyEL), is financed
by employer and employee contributions.
Contributions are determined annually by
the MSAH. Private insurance companies,
funds and foundations, which are authorised by the MSAH administer TyEL.
Earnings-related and national pension
benefits include the old age pension, disability pension (unemployment pension) and
survivors’ pension. The part-time pension
falls within the sphere of the earnings-related pension.
Pensions may be supplemented by housing
allowance for pensioners, care allowance for
pensioners and front-veterans’ supplement.
Pensions
Pensions ensure financial security in old age
or in the event of disability and unemployment in later life, and as such they form
another pillar of the social security system.
Guarantee pension
The guarantee pension increases the minimum pension level to a yearly adjusted
amount (€ 739 per month in 2013). The
19
Age
64,0
63,5
63,0
62,5
62,0
61,5
61,0
60,5
60,0
59,5
59,0
58,5
58,0
57,5
57,0
amount of the guarantee pension is affected
by any other pension income, but is not otherwise means-tested.
Expectancy for 50-year-olds
Expectancy for 25-year-olds
Pension benefits
Disability pension
Long-term loss of income due to work incapacity is covered by disability pensions. The
basis for determining disability for work is a
1996 97 98 99 2000 01 02 03 04 05 06 07 08 09 10 2011
report on the claimant’s state of health and
assessment of remaining work capacity.
Figure 4. Expected effective retirement age
Source: The Finnish Centre for Pensions
The disability pension may be granted
either indefinitely or for a set period, in
which case it becomes rehabilitation allowPension
Pension
euros/month
ance. Under the earnings-related pension
euros/month
(gross)
1750
system disability pension or rehabilitation
1750
1500
benefit can also be granted in the form of a
1500
Pension
partial pension.
1250
euros/month
1250
In the earnings-related pension scheme
1750 1000
a disability pension is paid to an employed
1000
1500 750
or self employed person under 63 whose ca750
500
pacity for work has been impaired because
1250
500
250
of illness, impairment or injury for at least
1000
250
Wage
one year. If a person’s ability to work has
0
750
Wage
euros/
0
been reduced by at least three fifths, the
euros/
0
500
1000 1500 2000 2500 3000 3500 month
500
0
500
1000 1500 2000 2500 3000 3500 month
pension is granted in full. If work ability has
250 Earnings-related
been reduced by at least two fifths, a partial
Residence-based
Guarantee
Netto
■
Earnings-related
Wage
Earnings-related
Residence-based
Guarantee
Netto disability pension is granted.
0
euros/
■
National pensions
0
500
1000 1500 2000 2500 3000 3500 month
A cash rehabilitation benefit is paid to a
■
Guarantee
person who is unfit for work and whose in
Net Residence-based
Earnings-related
Guarantee
Netto
jury or disease is thought likely to be cured
through therapy or rehabilitation. For a benFigure 5. Total pension 2012
Source: The Finnish Centre for Pensions
efit to be awarded the person must be unfit
20
21
for work continuously for at least one year.
The benefit can be withdrawn if there is a
change in work ability or if the recipient refuses rehabilitation without good reason.
A full disability pension and cash rehabilitation benefit can be converted into
a partial disability pension or partial cash
rehabilitation benefit as the person’s work
ability and earnings change. A person in receipt of a full disability pension may have a
maximum of 40% and a person with partial
disability pension a maximum of 60% of
their earlier regular earnings.
Projected pensionable service – the time
from the onset of work incapacity until one
reaches the statutory retirement age – is
taken into account on certain conditions in
disability pensions. The earnings for projected pensionable service are determined,
as a rule, based on the insured earnings for
the five calendar years preceding the year of
the onset of work incapacity.
In the national pension scheme, if one
is aged between 16 and 64, residing in Finland, or in another EU or EEA Member
State and unable to work one is eligible for
a disability pension under the national pension scheme. One is eligible for a disability
pension if, owing to illness, impairment or
injury, one is unable to do one’s usual work
or comparable work.
The disability pension is paid in the form
of a disability pension or fixed-term cash re22
habilitation benefit. In order to qualify for a
disability pension under the national pension
scheme one must have lived in Finland for a
minimum of three years in all after the age
of 16. Someone under 21 who has become
disabled while living in Finland receives the
pension without the qualifying period. The
pension sum is proportional to the time of
affiliation to the national pension scheme.
Old-Age Pension
Within the framework of the earnings-related pension scheme it is possible to retire
on a pension flexibly at your choice between
63 and 68. A disability pension is converted
into an old-age pension as the pensioner attains the age of 63.
On reaching the age of 65 people resident
in Finland or another EU or EEA Member
State are entitled to an old-age pension under the national pension scheme. It is possible to defer the application for national pension, in which case its amount is increased.
Finnish nationals and nationals of other EU
or EEA Member States must have been resident in Finland for a minimum of three years
after reaching the age of 16.
Earnings-related pensions are calculated
based on annual earnings, in regard to selfemployed persons based on the annual insured earnings. Pension accrues by the following percentages according to age:
1.5%
1.9%
4.5%
18–52 years
53–62 years
63–67 years
If you work while in receipt of a pension,
the pension accrues based on the employment up to 1.5% of the income from work.
Your pension also accrues on earnings based
on earnings-related social security benefits
(i.e. sickness/parental allowance and unemployment allowance).
Since 2005 pension has also accrued for
periods of studies leading to a degree or diploma and for periods of care of a child under the age of three. This pension is financed
by the state.
An old-age pension under the national
pension scheme is paid only if the person
does not obtain any other pension or the
pension is small.
The amount of national pension also depends on the length of the period the person
has been resident in Finland between the ages
16 and 65. The requirement for entitlement
to a full old-age pension is that the person has
been resident in Finland for at least 40 years.
Survivors’ pension
Under the earnings-related pension system,
the survivors’ pension compensates for a
family’s lost income caused by the death of
the breadwinner. Under the national pension system, on the other hand, the survi-
vors’ pension safeguards a minimum income for the surviving spouse and children.
Survivors’ pensions may be paid from both
systems.
In both pension schemes surviving partners are entitled to a survivors’ pension,
provided that their marriages or registered
relationships took place before the deceased
partner reached the age of 65.
A surviving partner is always entitled
to a pension if the couple has or has had a
child. If they have not had a child the conditions for receiving the survivors’ pension
require that the surviving partner is at least
50 at the times of the bereavement. In the
earnings-related pensions scheme the age
limit does not affect a surviving partner
who has been receiving a disability pension
for at least three years. In addition, the marriage/registered relationship must have taken place before the surviving partner is 50
and must have lasted for at least five years.
Remarriage or a new registered relationship
before the survivor is 50 means the survivors’ pension ceases.
A child’s pension, under the national
pension scheme, is paid to a partial or
full orphan under 18 who is resident in
Finland or another EU Member State. A
student receives a child’s pension until
the age of 21. In the earnings-related pensions scheme children under 18 are paid a
pension following the death of a parent or
other legal guardian.
23
In the earnings-related pension scheme
a survivors’ pension is based on the pension
the deceased had or would have had if he/
she had become unfit for work just prior to
death. The pension is divided between the
survivors. The surviving partner’s own earnings-related pension and income determine
the amount of the survivors’ pension he/she
receives.
In the national pension scheme the
survivor’s pension is paid in the form of an
initial pension for six months and thereafter
as a continuing means-tested pension. The
continuing pension ceases when the surviving partner reaches the age of 65 or starts to
receive her/his own pension.
Unemployment Pension
The unemployment pension was designed
to provide income security for older people
who become unemployed and are under retirement age. This is being phased out. The
pension can be granted only under the national pension scheme to people born before
1950 and it is converted to an old-age pension at the age of 65. In the earnings-related
pension scheme new unemployment pensions are no longer granted.
Early retirement pension benefits
In the earnings-related pension scheme people born in 1954 or thereafter may take parttime pension at the earliest at the age of 61.
24
Child Increase
National pensions may be augmented by an
additional payment for children under 16.
Claimants are eligible if they receive a national or earnings-related pension.
Pension payments are increased for each
child of the claimant or spouse who lives in
the same household. It is also available in the
case of foster children. The child increase is a
flat rate benefit, tax free and adjusted annually to changes in the National Pension Index.
Unemployment benefits
Unemployment allowance
The Social Insurance Institution pays basic
unemployment allowance in the form of a
daily flat rate benefit. The basic unemployment allowance is paid to unemployed job
seekers aged between 17 and 64 who were
employed for at least 43 weeks during the 28
months preceding unemployment.
Earnings-related unemployment allowance is available to people who belong to
an unemployment fund and can be paid for
up to 500 days. Membership of an unemployment fund is voluntary. The earningsrelated unemployment allowance is calculated on the basis of the claimants’ regular
monthly pay for the 10 months preceding
unemployment.
To be eligible for unemployment benefits
claimants must live in Finland, register with
an unemployment office as an unemployed
job seeker, be in search of full-time work, be
fit to work and meet the condition concerning previous employment.
Self-employed people are eligible for the
allowance as long as they have worked in a
self-employed capacity for 24 months out
of the previous 48 before becoming unemployed and their business activity has been
sufficiently large scale. The earnings-related daily allowance is paid to self-employed
claimants who have been a member of an unemployment fund for self-employed people.
A claimant’s spouse’s income does not
affect the amount of the unemployment allowance. If claimants have lost their jobs due
to business or production factors, they may
receive a higher rate of basic unemployment
allowance. This increase comprises an employment programme supplement and an increment.
Labour market subsidy
If claimants do not meet the requirements
for the unemployment allowance, they
may be entitled to labour market subsidy.
The Social Insurance Institution also pays
this. The labour market subsidy is a meanstested benefit equal to the basic unemployment allowance. The subsidy is paid for an
unlimited period.
The labour market subsidy is designed to
give financial assistance for unemployed job
seekers who have joined the labour market
for the first time or else do not have recent
work experience.
It is also meant for people who are longterm unemployed who have come to the
end of their 500-day entitlement to basic or
earnings-related unemployment allowance.
Unemployed people who are living with
their parents and who do not meet the minimum employment requirement receive 50%
of the means-tested labour market subsidy.
Extended unemployment allowance
The labour market subsidy is paid until
statutory retirement age, while unemployment allowance carries a 500-day ceiling.
For older people who are unemployed and
who meet the conditions concerning previous employment there is an extended unemployment allowance.
If claimants who were born between
1950 and 1954 are paid unemployment allowance when they reach the age of 59, they
are eligible for an extended allowance. This
is payable up until the end of the month
during which they reach the age of 65. After
this they receive old-age pension. Claimants
born in or after 1955 must reach 60 years of
age to be eligible for an extended allowance,
while for claimants born in or after 1957 the
age limit is 61.
25
The requirements are that they receive
unemployment allowance for employees,
and they have to have been in work for
at least five years out of the last 20 years.
Extended unemployment allowance is not
available for people who receive unemployment allowance for self-employed people.
Housing Benefits
General housing allowance
General housing allowance is provided for
low-income households in rented or owner-occupied houses and apartments. The
amount of the allowance is based on such
things as income, cost of living and size of
the flat and family.
Housing allowance for pensioners
This allowance is payable to people over
65 years old or to people aged from 16 to
64 who receive a pension and are resident
in Finland. The amount of housing allowance depends on family relations, income
and property. Housing allowance for pensioners is payable for reasonable housing costs that exceed the occupant’s own
share of 85%.
26
Housing supplement for students
Students can receive a housing supplement,
if they have no children and live in rented or
partial-ownership accommodation. If they
are not eligible for the supplement – if they
have children or are owner-occupiers – they
can apply for the general housing allowance.
Housing assistance for conscripts
Conscripts performing military service may
be entitled to housing assistance, which can
also be paid to their families.
Social Assistance
Social assistance is a last resort form of income security. Local authorities pay meanstested social assistance when the income and
resources of a household are insufficient to
cover necessary daily expenses.
Social assistance is divided into three
categories: basic, supplementary and preventive.
The aim of preventive social assistance
is to help enable individuals and families to
manage independently and to prevent social
exclusion and long-term dependence on social assistance.
5. Rights of complaint and appeal
There are specific procedures clients and
patients may use to appeal various decisions and practices that concern them in
the administration of various aspects of the
social security system.
A person obtains decisions relating to
statutory social security benefits in writing,
and if the person is dissatisfied with a decision, he or she may appeal against it. Appeal procedure is two-staged and the first
instance of an appeal is an appeal board.
Social Insurance
Institution (Kela)
Earnings-related pension insurance providers, Keva, Finnish
Centre for Pensions,
Federation of
AccidentInsurance
Institutions
Accident insurance
institutions, Finnish
Centre for Pensions,
Federation of
Accident Insurance
Institutions
Social Insurance
Institution (Kela),
unemployment
funds
Social Security
Appeal Board
Employee Pensions
Appeal Board
Occupational
Accidents
Appeal Board
Unemployment
Appeal Board
Insurance Court
27
www.stm.fi/benefits
Authorities and institutions
Ministry of Social Affairs and Health
www.stm.fi
Social Insurance Institution
www.kela.fi
Finnish Centre for Pensions
www.etk.fi
Finnish Institute of Occupational Health
www.occuphealth.fi
Association of Local and Regional Authorities
www.localfinland.fi
Federation of Accident Insurance Institutions
www.tvl.fi
National Institute for Health and Welfare
www.thl.fi
The Finnish Pension Alliance TELA
www.tela.fi
Keva (public sector pensions)
www.keva.fi
MINISTRY OF SOCIAL AFFAIRS AND HE ALTH
Tel. +358 295 16001 (Government Switchboard)
Postal address PO Box 33, 00023 Government
www.stm.fi
This brochure can be downloaded from the Ministr y of
Social Affairs and Health website:
www.stm.fi/en/publications
E-mail ordering ser vice
Place an e-mail order for the Ministr y’s most recent
- publications
- bulletins and online news
- Focus ar ticles
- municipal information bulletins
Place your e-mail order at:
www.stm.fi/tilauspalvelu
ISBN 978-952-00-3371-2 (pb)
2013:8eng
For more information on benefits and payments, please see